Here’s Why Tether Gold (XAUt) Price Is Falling Even With Growing Gold Demand

Tether Gold price trades with a negative bias on Tuesday as a stronger U.S. dollar and rising Treasury yields pressure the non-yielding asset. The decline unfolds even as geopolitical tensions linked to the US-Iran conflict keep investors cautious. Current macroeconomic forces are outweighing safe-haven demand in the near term.

Tether Gold Price Slides as Dollar Strength and Yields Weigh on Price

As of press time, the Tether Gold price is trading at around $5,061 after dipping below $5,100. However, the price decline from the day’s lows seems to have stabilized somewhat. Yet again, the price decline is around 4.15%. Such price movements in the Tether Gold price are part of the overall decline in the gold market.

The fall in the Tether gold price today marks a significant shift as gold and silver had neared all-time highs (ATHs) after the war between the U.S. and Iran first broke out over the weekend.

The rise in the U.S. Dollar Index to levels above 99.00, the highest in over a month, is notably affecting these bullion prices. An appreciation in the U.S. currency makes bullion more expensive for investors in other countries. The Tether Gold price is also affected in the same manner because it is backed by physical gold. 

The rise in the U.S. 10-year Treasury yield also affects bullion prices. Over the last two days, the yield on the 10-year U.S. Treasury has risen by nearly 17 basis points. Such a rise in yield affects bullion prices because investors prefer to put their money in assets that yield better than bullion. 

The geopolitical situation continues to have a major impact on bullion prices. Over the weekend, the United States and Israel launched strikes in Iran. In retaliation, Iran struck back at U.S. bases in different countries in the Gulf region. 

Iran War To Boost Gold, Peter Schiff Claims

In an X post, Peter Schiff claimed that the war with Iran would cause damage to stocks, bonds, housing, employment, and the banking system, while boosting the price of gold. However, it is worth noting that BTC is currently having the upper hand over gold. 

BTC has gained over the gold price, with the leading crypto rising to as high as $68,000, even as the Tether gold price fell to $5,000. Despite the current setback, the precious metal could still reach new highs, as JPMorgan predicts gold will reach $6,300 this year.

In the meantime, the Tether gold price faces downside pressure with the dollar rising. The surge in oil prices is also contributing to the strengthening of the dollar. Juan Perez, who works for Monex USA, noted that crude oil invoices are mostly settled in dollars. That means that the increase in oil prices boosts the demand for the dollar.